UMI Files New Anti-Trust Complaint Against BIEM

Universal Music International (UMI) has stepped up its battle on music licensing in Europe, filing another anti-trust complaint against BIEM, the international trade body representing collecting societies.

The 150-page submission, filed yesterday with the European Commission in Brussels, disputes BIEM's defense last September to UMI's earlier claim that the trade body has a monopoly on licensing of mechanical reproduction rights in Europe (Bulletin, Sept. 17, 2002). UMI responds on a point-by-point basis and says many of BIEM's claims are "inaccurate, misleading, or not relevant to the issues raised by Universal."

UMI claims that BIEM acts as a cartel, abusing its dominant position in the licensing sector and dictating unfair terms to music companies. The major says BIEM's royalty rate forces European record companies to pay close to 11% of the average revenue on each album, by far the highest rate in the world.

The new complaint includes an economic analysis commissioned by UMI but prepared independently by New York University economics professor Janusz Ordover, former chief economist for the U.S. Department of Justice's anti-trust division. The report says changes to the terms and conditions of the BIEM standard contract would help foster competition and boost the music industry's efficiency and consumer welfare.

UMI chairman/CEO Jorgen Larsen says BIEM's standard contract is incompatible with EU anti-trust laws and works against the interests of consumers. "Universal is not against the existence of the standard contract as such, nor of collective licensing," he says. "We think both can work fairly and efficiently for everyone's benefit, but that is not the case at present."

UMI filed its first official complaint on the matter with the EC last summer (Bulletin, July 31, 2002).

BIEM representatives could not be reached for comment.